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Power law for the duration of recession and prosperity in Latin American countries

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Author Info

  • Redelico, Francisco O.
  • Proto, Araceli N.
  • Ausloos, Marcel

Abstract

Ormerod and Mounfield [P. Ormerod, C. Mounfield, Power law distribution of duration and magnitude of recessions in capitalist economies: Breakdown of scaling, Physica A 293 (2001) 573] and Ausloos et al. [M. Ausloos, J. Mikiewicz, M. Sanglier, The durations of recession and prosperity: Does their distribution follow a power or an exponential law? Physica A 339 (2004) 548] have independently analyzed the duration of recessions for developed countries through the evolution of the GDP in different time windows. It was found that there is a power law governing the duration distribution. We have analyzed data collected from 19 Latin American countries in order to observe whether such results are valid or not for developing countries. The case of prosperity years is also discussed. We observe that the power law of recession time intervals, see Ref. [1], is valid for Latin American countries as well. Thus an interesting point is discovered: the same scaling time is found in the case of recessions for the three data sets (ca. 1 year), and this could represent a universal feature. Other time scale parameters differ significantly from each other.

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Bibliographic Info

Article provided by Elsevier in its journal Physica A: Statistical Mechanics and its Applications.

Volume (Year): 387 (2008)
Issue (Month): 25 ()
Pages: 6330-6336

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Handle: RePEc:eee:phsmap:v:387:y:2008:i:25:p:6330-6336

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Web page: http://www.journals.elsevier.com/physica-a-statistical-mechpplications/

Related research

Keywords: Econophysics; Recession; Prosperity; Latin America;

References

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  1. Ausloos, Marcel & Clippe, Paulette & Pȩkalski, Andrzej, 2004. "Evolution of economic entities under heterogeneous political/environmental conditions within a Bak–Sneppen-like dynamics," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 332(C), pages 394-402.
  2. Ormerod, Paul & Mounfield, Craig, 2001. "Power law distribution of the duration and magnitude of recessions in capitalist economies: breakdown of scaling," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 293(3), pages 573-582.
  3. Marcel Ausloos & Paulette Clippe & Janusz Mi\'skiewicz & Andrzej Pekalski, 2004. "A (reactive) lattice-gas approach to economic cycles," Papers cond-mat/0402075, arXiv.org.
  4. Miśkiewicz, J. & Ausloos, M., 2004. "A logistic map approach to economic cycles. (I). The best adapted companies," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 336(1), pages 206-214.
  5. Ausloos, Marcel & Miśkiewicz, Janusz & Sanglier, Michèle, 2004. "The durations of recession and prosperity: does their distribution follow a power or an exponential law?," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 339(3), pages 548-558.
  6. Ausloos, Marcel & Clippe, Paulette & Pȩkalski, Andrzej, 2003. "Simple model for the dynamics of correlations in the evolution of economic entities under varying economic conditions," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 324(1), pages 330-337.
  7. Wright, Ian, 2005. "The duration of recessions follows an exponential not a power law," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 345(3), pages 608-610.
  8. Ausloos, M & Clippe, P & Pekalski, A, 2004. "Model of macroeconomic evolution in stable regionally dependent economic fields," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 337(1), pages 269-287.
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Cited by:
  1. Redelico, Francisco O. & Proto, Araceli N. & Ausloos, Marcel, 2009. "Hierarchical structures in the Gross Domestic Product per capita fluctuation in Latin American countries," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 388(17), pages 3527-3535.
  2. Paul Ormerod & Amy Heineike, 2009. "Global recessions as a cascade phenomenon with interacting agents," Journal of Economic Interaction and Coordination, Springer, vol. 4(1), pages 15-26, June.

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